Market picks winners and losers after Hanaro vote

The winners and losers from Hanaro’s decision to accept an investment and loan package were fairly easy to spot, and equities investors reacted according to form on Korea’s stock markets yesterday. The $1.1-billion infusion from a consortium led by AIG and Newbridge Capital of the United States was seen nearly unanimously by brokers as a good thing for Hanaro; only LG Investment and Securities, a part of the LG Group, was selling Hanaro yesterday. Despite those sales, Hanaro rose by 3 percent in yesterday’s trading. The previous night in Korea, the firm’s American Depository Receipts surged by 8.6 percent on the New York market. SK Telecom, Korea’s largest cell phone service provider, also advanced. SK is one of the larger owners of Hanaro, and would have been pushed to the margins had LG succeeded in its rival bid for management control. Brokers said the Hanaro decision gave SK a more secure foothold in the landline telephone business through Hanaro’s facilities. But LG telecommunications units lost ground in yesterday’s trading. Hanyang Securities saw Hanaro as a “turnaround issue,” saying the capital influx would stabilize its financial status and reduce its interest burden, leading to what it predicted would be black ink next year. Daeshin Securities cautioned that there were still some uncertainties ahead, but raised its recommendation to “buy” and its target price to 4,500 won ($3.80) per share. “Hanaro is now able to take an aggressive stance in getting subscribers to its high speed Internet services, although it procrastinated before,” said Seong Tae-hyeong, a Hanyang stock analyst. Telecommunications appliance makers such as Dasan Networkers also gained in the expectation of more orders from Hanaro. But Dacom, the Internet unit of LG Group, plunged more than 7 percent. Hyundai Securities downgraded its investment opinion of Dacom, saying that the company’s 1 trillion won in outstanding debts would keep its stock price depressed. LG Telecom also lost 2 percent. by Sohn Hae-yong